RAMS offer sees shares on the rise
Non-bank lender Resimac has made a bid to acquire the remnants of mortgage firm RAMS in a joint proposal with former Babcock & Brown banker Trevor Loewensohn.
The conditional proposal values the target, known as RHG Mortgage Corporation, at about $130 million. The offer saw RHG shares surge 9.5per cent to 41¢. Resimac made an approach to buy RHG's loan book earlier this year, but that bid failed because the price was too low.
Under the latest proposal, Resimac and Australian Mortgage Acquisition Company [AMAC], an entity formed by Mr Loewensohn, are offering 41.5¢ a share for RHG plus 1.5¢ a share in franking credits.
RHG's main asset is the lending book of RAMS, which was a key competitor against the big banks before the global financial crisis.
In 2007, the RAMS branch network and brand was sold to Westpac for $140 million as the early tremors of the US subprime crisis were being felt on funding markets.
RHG is now running down its mortgage book but not making any new loans. It made a $40.7 million profit in 2012. RHG said in a statement that its directors were assessing the proposal and would update the market when appropriate.